The mobile wallet business, which is just gaining popularity in India, has received quite a leg-up from the RBI. Banks have been also been creating platforms of their own to promote this form of transactions.

The next big growth in mobile wallet business will happen when a lot of offline payments start happening on this platform, says Bipin Preet Singh, co-founder of Mobikwik. Edited excerpts from his interview with ET:What do you think is the future of the mobile wallet business?

We look at the payments industry as a pyramid, at the bottom is the bill payments and recharges. On top of that is getting integrated all the online marketplaces which will accept Mobikwik wallet payments.

The third level for us is to get offline merchants to start accepting wallet payments and the final stage would be money management. For offline, we have already started working with Big Bazaar to accept wallet payments and within a month of starting we have processed 3-5% of the total transactions of Big Bazaar.

Will inter-operability of wallets help increase acceptance?

I think today it is not that important, it is too early. Other than a few wallet operators, others do not have the kind of scale that would make interoperability extremely important.

However, once the scale is achieved then there would be pressure automatically on the regulators to start interoperability. Are you facing threat from banks who are developing their own wallet apps, like Pockets and PayZapp? I think the competition is only from the sentimental and conceptual points of view.

More HDFC Bank customers use PayTm or Mobikwik than PayZapp. This is not their strong point, because it is not the banks' business. Payments and wallet business is something we are dealing with day in and day out. We are in the consumer intermediary space. I have a sense of the pulse of the customer.

The banks' core competency is regulatory, lending and mostly deposits. On the consumer side, banks struggle to even develop their one own app for all kinds of solutions. The consumers will not lose their interest in banks but what will happen is that they will rely on wallets for smaller transactions. Our banks are not even ready to invest that much of money into the promotion of their wallets. We have spent $20 million to develop the wallet and promote it.

What is your take on the RBI and the regulatory environment? Is it hampering growth of fintech startups?

The Reserve Bank has been extremely progressive. We operate under the PPI licence. The regulations under this licence has become much smoother. When we started, you could use wallets only for recharges. Now they have opened it up. The limit for KYC customers have been increased from Rs 50,000 to Rs 1 lakh.

Now, they have also started domestic money transfer which they did not allow earlier and even started talking about cashouts. I feel RBI does not look at it as something they need to regulate. They look at the payments space as something they want to develop.

As a financial startup what has been your experience while accessing funding in the country?

I think good companies with a solid business plan, good execution and proof of past performance and good future potential will be able to raise money. But younger companies are having a difficult time unless they prove they can sustain and have a long-term business model. In 2015, a lot of funding came in even for companies with flimsy business plans. I believe that people's faith in the wallet as a business segment has improved. If a company does not get 20 million to 30 million users, then it is not scalable.

We already have around 25 million users with around 40% of them being active ones. We process around 20 million transactions per month. The next big growth will happen when a lot of offline payments happen on this platform. I have faith in my business model.

You had not got a licence at first, would you be interested in getting a payments bank licence in the next stage from the RBI?

I am sure that we will get the licence, I think it is just a matter of time. The bigger question for me is what we do when we get the licence. All this while we were able to execute all the ideas that we had since we did not get the payments bank licence.